A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 8, it paid the full amount due. Assuming the company uses the gross method to record purchases, the journal entry to record the cash paid on July 8 is:

Multiple Choice

• Debit Accounts Payable, $1,800; Credit Merchandise Inventory, $36; Credit Cash, $1,764.

• Debit Accounts Payable, $1,568; Credit Cash, $1,568.

• Debit Accounts Payable, $1,600; Credit Merchandise Inventory, $32; Credit Cash, $1,568.

• Debit Accounts Payable, $1,568; Debit Merchandise Inventory, $32; Credit Cash, $1,600.

• Debit Accounts Payable, $1,600; Credit Cash, $1,600.